Karnataka, which is under financial stress due to the Covid-19 pandemic, has cancelled the provision for government employees to encash their earned leaves in the 2021 calendar.
Only those employees who retire in the calendar year will be eligible to encash their earned leaves in the month in which they superannuate.
A government order issued by the Finance Department cites “severe financial stress” as the reason for the decision to cancel encashment of earned leaves.
Government employees have the provision to encash up to 15 days of earned leave.
In May 2020, the state government froze the dearness allowance increases for government employees and pensioners with effect from January 1, 2020, till June 2021.
“Encashment of earned leave was cancelled when the Government of India froze dearness allowance hikes last year. This order is like an extension of the cancellation,” a senior Finance Department official said.
The fresh order cancelling encashment of earned leave will also apply to employees working in government undertakings, aided or unaided, the order stated.